Nearly half of consumers overcharged for utilities

Consumers are owed nearly £1bn by their utility providers, as direct debit
billing leaves energy and electricity companies banking the interest on a
mountain of customers’ cash, new research has shown.

Research by website Go Compare found that one in five consumers had a credit balance of over £100 on their utility bills.Photo: Alamy

Almost half of British people surveyed had a positive balance on their gas or electricity bills, and those in credit were owed an average of £78.50, according to research by price comparison website Go Compare.

The overpayments are due to direct debit payments, which are based on estimates made at the start of the year.

The research found that one in five consumers had a credit balance of over £100, and that overpayments might be leaving utility companies with a cash mountain of over £970m, costing their customers millions in lost interest.

Jeremy Cryer from Gocompare.com said: "Paying utility bills by direct debit can be a good way of saving money as most suppliers offer discounts to customers paying in this way.

"However, the method suppliers use to calculate direct debt payments can lead to customers paying way more than they need to.”

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Utility companies charge monthly direct debits based on an estimate of consumers’ annual usage. Overpayments mean consumers are in effect lending money to utility companies, rather than putting it to work for themselves.

Regularly checking gas and electricity meters can help consumers make sure that they are not paying over the odds.

Jeremy Cryer continued: "Energy usage is seasonal, so if you find that your account is in surplus after your heavier usage winter bills have been paid, then it's time to contact your provider to ask for a refund and for the level of future direct debit payments to be reduced.”

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